In the Simple Deposit Expansion Model,if the Banking System Has

question 173

Multiple Choice

In the simple deposit expansion model,if the banking system has excess reserves of $75,and the required reserve ratio is 20%,the potential expansion of checkable deposits is

• A)$75.
• B)$750.
• C)$37.50.
• D)$375.

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Definitions:

Production Possibility Frontier

A graphical representation depicting the maximum output possibilities for two goods, given a set of inputs, highlighting the trade-offs in production choices.

Efficiency

The ability to achieve a desired outcome or output with the least waste of time, effort, or resources.

Production Possibility Curve

A graphical representation that shows the maximum possible output combinations of two goods or services an economy can achieve with existing resources and technology.

Capital

In economics, capital refers to the financial assets or the resources that businesses use to produce goods and services, such as equipment, buildings, and machinery.